Boeing is making a big financial move to save one of its key suppliers. The jet maker this week confirmed it’ll advance $350 million to Spirit AeroSystems. Spirit makes the fuselage for Boeing planes.
Boeing is doling out money to keep Spirit afloat. This comes as the supplier is experiencing high levels of inventory and financial problems. Spirit is the largest employer in Wichita, Kansas.
The company has announced it might not be able to keep operating due to billions of dollars in losses over the last four years.
In 2019, the Federal Aviation Administration (FAA) grounded the Boeing 737 Max after two deadly crashes. This caused inventory to back up as orders dropped. That problem eventually trickled down to Spirit.
Boeing’s maintenance problems have continued, including a door plug blowing off a flight in mid-air earlier this year and the recent machinists union strike.
In March, an FAA audit of the manufacture of the 737 Max at Boeing and Spirit AeroSystems found multiple instances of the companies failing to make sure quality standards were met.
Spirit then laid off 450 workers in May in a cost cutting move. In late October, the company furloughed another 700 employees for 21 days. The furloughed workers built the fuselages for the Boeing 767 and 777 planes.
Boeing has now agreed to acquire Spirit AeroSystems in an all-stock transaction worth close to $5 billion. The deal is expected to be completed by mid-2025.